I don’t know how many of you have seen this but there’s a very provocative and hard-hitting article by Adam Hartung at Forbes, entitled "Oops! Five CEOS Who Should Have Already Been Fired" which will make very uncomfortable reading for Microsoft CEO Steve Ballmer.
Hartung doesn’t pull any punches in his judgement of Ballmer’s performance over the past 12 years. Placing the Microsoft boss at number one on his list, he starts as follows: "Without a doubt, Mr Ballmer is the worst CEO of a large publicly traded American company today." He then goes on to cite the familiar litany of failures, including Vista (anyone remember Vista?) and accuses Ballmer of having "singlehandedly steered Microsoft out of some of the fastest growing and most lucrative tech markets (mobile music, handsets and tablets)".
These failures have had a serious effect on Microsoft’s share price which has fallen from $60 per share in 2000 when Ballmer took the reins to a current level of not much more than half that figure. "So today Microsoft, after dumping Zune, dumping its tablet, dumping Windows CE and other mobile products, is still the same company Mr Ballmer took over a decade ago. Microsoft is a PC company, nothing more," Hartung adds.
Now, I’m not going to disagree with that statement but I wonder if Hartung is being a little bit harsh in his judgement of Ballmer. The big question which he doesn’t ask is whether Microsoft would be any better if Bill Gates had stayed in situ. I for one wonder whether Ballmer’s denigration of Apple products like the iPod, iPhone and iPad is any different from Gates’ view of them. After all, there was a story back in March 2009 where Melinda Gates told Vogue magazine her husband wouldn’t let his kids have any Apple products like iPods or iPhones in the house. The problem for Gates and Microsoft was that it couldn’t ban everyone else from buying them.
The fact is Microsoft was very slow to the music party with the Zune and when it did arrive, it wasn’t very convincing. One thing people can tell, especially when it comes to buying products in the retail environment, is whether a company is doing something out of sufferance or because it believes wholeheartedly in the technology.
Microsoft’s PC heritage and Windows ecosystem have worked to its advantage in many ways through the course of its history, but they have also acted as serious inhibitors in those areas which are now taking off with such a vengeance. Given that Gates was as much steeped in that heritage as Ballmer, probably more to be honest, it’s hard to see how the company could be in any different place than it is today if Ballmer wasn’t there.
The fact is businesses like Microsoft that achieve a huge level of dominance in a particular market are likely to see everything else through the prism of that dominance. Their decisions are going to be dictated by how their dominant position in one area can be exploited to deliver dominance elsewhere (and whether it’s worth the effort). Microsoft needed a very strong business case to pursue these types of opportunities because there was a level below which they would have made no sense to do so for a company of its size with its fingers in several lucrative markets.
In many ways, Microsoft had become a technological giant dependent for its success on the corporate, enterprise and business sectors rather than the home market. As a result, it was much slower to spot trends than Apple, which had far less baggage in the corporate space and had the importance of the user experience ingrained in its DNA.
One thing which all the fast growing technological areas cited by Hartung have in common is the importance of allying an effective and enjoyable user interface with the device. The fact that Microsoft has, so far at any rate, failed to make any kind of dent in these markets is because it approaches things from a very different angle. It is very difficult for people who have come up through the Microsoft culture to change that angle of perception and see things beyond the comfort zone of Windows and the PC.
As Hartung states, Microsoft is a PC company. That’s the real reason why it has failed to make its mark in the music, handset and tablet markets so far. And as CEO of Microsoft, it’s not Ballmer’s fault that he has tended to act like the CEO of a PC company.
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